One side effect of the success of U.S. coal exports is the degree to which may they have cancelled out the carbon emissions reduction experienced in the U.S. as shale gas displaced coal in the power generation sector. This question of displacement was addressed in a study just released by researchers at the University of Manchester.

The Study’s lead author Dr. John Broderick had this comment on how the coal to gas switching is being broadly viewed.“Research papers and newspaper column inches have focused on the relative emissions from coal and gas. However, it is the total quantity of CO2 from the energy system that matters to the climate.”

It is easy to forget that oil is not the only energy resource with global interactions. Changes in nuclear power use in Japan and the linkage of LNG prices to an oil benchmark impacted the price of seaborne LNG putting pressure on European power generators to expand their use of coal. Add this to the drop in the price of North American thermal coal to levels that made it more competitive in foreign markets and the movement of this carbon intensive fuel shifted off shore.

The issues of climate and energy are bonded at the hip. If either side in the debate over climate and energy forget that relationship the outcome will be unsatisfactory for everyone. One sided solutions are destine to fail the test of time.

Jim Hansen is an investment advisor at Ravenna Capital Management based in Seattle, Washington. He has spoken at the ASPO-USA national conference as well given other public and academic presentations. His weekly report The Master Resource Report is available online.